Deivatives Known Unknowns and Regulators

Few days back I did the post on OTC Derivatives Market And Reform with the intentions that over-the-counter (OTC) derivatives market is like a rigged poker game. They picture a smoke-filled room, in which unsuspecting clients are mastered by skilful opponents at investment banks known, perhaps appropriately, as dealers. Now regulators are trying to move more of the game into the open, by shifting OTC derivatives trades onto exchanges or electronic platforms by the end of this year, a target agreed on by G20 leaders in 2009.The dead line is unlikely to Continue reading “Deivatives Known Unknowns and Regulators”

The Barclays Saga and Libor

A week before I did a story on the manipulation of the London Interbank Offered Rate   “LIBOR Manipulation : ny thing for you Big Boyz ”

As the blood flows from the proverbial carcass of Former Barclays chief executive Bob Diamond and political pressure claims the scalp of COO Jerry del Miser, the key focus up to what extent Barclays is culpable for the Libor saga and just how much markets should fear litigation and rolling heads at other head institutions.

I have tried to put in the understanding and the importance of LIBOR.

LIBOR has been called “the highway of finance” because it serves as the universal interbank benchmark interest rate used to price cash instruments in the real economy (deposits and loans) and short Continue reading “The Barclays Saga and Libor”

LIBOR Manipulation : ny thing for you Big Boyz

Well ever thought or imagine of influencing the reference rate. Barcalys did that exactly the same in return the regulator FSA fined it with the largest fine in an attempted manipulation of and false reporting of LIBOR and Euribor Benchmark rates.

The LIBOR rate is a critical element of the financial system. Before I move further some basics on it to understand the scenario: LIBOR stands for ‘London InterBank Offered Rate‘. It is produced for ten currencies with 15 maturities Continue reading “LIBOR Manipulation : ny thing for you Big Boyz”